Performance Management and Innovation

Innovation at Google The significance of innovation in creating and maintaining a competitive advantage in today's increasingly aggressive business environment cannot be overemphasized. Businesses that survive in such an environment are those that constantly deliver innovative offerings and/or reengineer their structures and processes amidst ever more changing market and industry conditions (Andriopoulos & Dawson, 2009). Google is one such organization that embodies innovation. With an innovation-oriented culture, the organization has, in a little more than a decade grown to be one of the most innovative organizations in the internet realm.

From its adword online advertising service and search engine, to its cloud computing service, browser, productivity software, social networking service, desktop applications, operating system, mobile applications, as well as a host of other internet products, the organization provides a perfect example of how innovation can be an engine for rapid growth. Based on responses obtained from an interview with one of the managers at the company's product development department, this report describes the company's experience with innovation.

In particular, this report seeks to understand how a culture of innovation is created and maintained, the role of top management in supporting innovation, and how internal and external talent is leveraged in the organization. Attention is also paid to barriers to innovation as well as the influence of performance measures and rewards on innovation. Recommendations for improvement are also provided. A Culture of Innovation Innovation thrives in an enabling environment.

It thrives in an atmosphere of inclusion, autonomy, teamwork and collaboration, participatory decision-making, as well as open and effective communication (Szymanska, 2015; Valencia, Jimenez-Jimenez & Sanz-Valle, 2016). An organization-wide understanding of innovation and its implications for organizational performance, as well as knowledge of individual responsibility in contributing creative ideas are also important for maintaining a culture of innovation (Andriopoulos & Dawson, 2009). Essentially, shared vision, mindset, beliefs, values, and expectations are crucial for driving innovation in an organization. Google's culture can be described as innovation-oriented.

According to the interviewee, there has historically been a conscious effort to orient all people and processes in the organization towards innovation. One way through which the company promotes innovation is by providing for and encouraging open and transparent communication. A major hallmark of open communication in the organization is short communication proviso between managers and employees. For instance, employees can directly email any manager in the organization on any matter pertaining to work.

This has been important for enhancing the manager-employee relationship, which ultimately boosts managers' communication of the organization's vision to employees. In addition, the company provides several channels through which teams can interact, and employees can express their views and learn about its developments. These formal and informal channels range from feedback surveys and employee forums to Google cafes, tech talks, company-wide meetings, as well as outdoor activities. Such platforms not only avail employees an opportunity to air their ideas, but also gain a clearer understanding of the company's innovation agenda.

Innovation at Google is also promoted by allowing employees to devote part of their daily work time to ideas that interest them. Products such as Gmail, Google News, and Adsense have actually emanated from such initiatives. Role of Top Management in Fostering Innovation The top management plays an important role in reinforcing a culture of innovation in an organization. As put by Mayle (2006), the innovation mindset must flow from the top and diffuse to every level of the organization.

The top management can demonstrate its dedication to supporting innovation by constantly reiterating the organization's commitment to innovation, describing the value of innovation to the organization, mobilizing and providing the necessary resources, identifying and addressing obstacles, and creating incentives for employees (Mayle, 2006). From the conversation held with the interviewee, Google commendably understands the role of top management in supporting innovation. One way through which this is evident is the organization's research and development (R&D) expenditure.

Google is one of the largest spenders on R&D, globally, with its annual R&D budget exceeding 10% of its annual revenues. This clearly demonstrates the management's commitment to providing resources geared towards innovation. The management's commitment to innovation is further epitomized by open and transparent interactions between managers and employees, the CEO's regular meetings with employees, as well as creative employee engagement strategies. Leveraging Internal and External Talent Innovative ideas may originate from within or outside the organization.

It is, therefore, imperative for an organization to leverage its internal talent effectively and its access to external talent in driving innovation (Andriopoulos & Dawson, 2009; West & Bogers, 2013). Leveraging internal talent is particularly important for accelerating productivity, enhancing employee retention, and, more importantly, minimizing the usually high costs associated with sourcing for talent outside the organization (Mayle, 2006). As intimated by the interviewee, Google is generally more focused on leveraging its internal talent.

This is mainly achieved via providing opportunities for not only learning and development (L&D), but also applying the knowledge acquired during L&D. Google invests in efforts to identify the L&D needs of its employees frequently through a scientific process. In the follow-up, employees are given individual and group tasks to experiment the skills and knowledge acquired during L&D. Internal talent at Google is also developed by encouraging employee-to-employee learning and problem-solving processes.

In recent times, for instance, the company has embarked on an initiative to produce a driverless car. The idea has largely stemmed from problem-solving processes within the organization; existing products such as Google Maps and Street View are the essential building blocks for the idea. Google also leverages its access to external talent. In agreement with West & Bogers (2013), the organization leverages external sources of innovation by obtaining feedback from customers, participating in co-creation processes, and collaborating with partners.

For instance, the organization conducts regular customer surveys in an attempt to measure satisfaction and find ways of improving its offerings. According to the interviewee, Google Chrome represents the outcome of such interactive processes; its origin and improvement can be attributed largely to customer satisfaction surveys. Moreover, products such as Google Translate and the ongoing driverless car have been or are being developed in partnership with other organizations. Influence of Performance Measures and Rewards on Motivation As mentioned earlier, maintaining a culture of innovation requires an enabling environment.

This environment relates to not only communication lines and organizational structure, but also performance and reward management. For employees to drive the organization's innovation agenda, they must be properly incentivized (Chen, 2015). An innovation-friendly culture is often characterized by objective performance measurement, performance-oriented compensation, as well as rewards, recognition, and appreciation for creative ideas (Nilsson & Ritzen, 2014). Without such an approach, it may be quite difficult to stimulate the innovative potential of employees or fuel the organization's innovation agenda.

Performance management and rewards are two aspects that differentiate Google from most other organizations. The company's approach to performance management is actually an epitome of innovation. As explained by the interviewee, the organization has particularly introduced a data-driven performance management system, which provides a more accurate rating of managers' and employees' performance. The system also helps the organization to scientifically determine the most suitable employee management techniques, recruit and hire employees, address diversity, forecast employee turnover, as well as carry out other critical people management processes.

Google's also relies on highly creative strategies to reward its employees. First, Google offers some of the most attractive remuneration packages in the industry. In addition, as narrated by the interviewee, the organization does not stop at the ordinary employee benefits such as vacation packages, medical cover, and tuition compensation -- it also provides benefits such as free lunch and dinner, a free gym, laundry facilities, compensation of legal expenses, as well as maternity benefits extending up to 4 months.

This largely explains why Google has been voted as the best company to work for in different forums across elite panels. More importantly, the organization's approach to performance management and rewards has become the benchmark for other organizations in diverse sectors and industries. Barriers to Innovation Whereas innovation generally has positive implications for organizational performance, its implementation does not come without its fair share of challenges. Common barriers to innovation include unfavorable legislation, low acceptability of the idea in the market, and competition (Mayle, 2006; Andriopoulos & Dawson, 2009).

These challenges are particularly important for Google. Potential barriers to commercializing the idea of a driverless car provide an ideal example. First, it is possible that the government will enact legislation disallowing driverless cars on the road. In fact, only five states in the U.S. have approved related legislation in spite of extensive lobbying by the company. The challenge of legislation may further be compounded by reluctance.